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Cellphone spammer multi-million-dollar class action

Submitted by gma on Mon, 07/01/2013 - 06:10

(Truman Lewis @ ConsumerAffairs) A federal judge is allowing a multi-million-dollar class action against an alleged cellphone spammer to go forward. Wise Media is accused of charging millions of consumers for services they didn't want or order.

The plaintiffs filed their case in October 2012, saying they had received unsolicited text messages from Wise offering flirting tips, horoscopes, celebrity gossip and weight loss advice, Courthouse News Service reported.

The Federal Trade Commission is also on Wise's case. It filed a complaint in April, asking the court to freeze the defendants’ assets immediately and order them to stop their “deceptive and unfair practices.”

It's the first time the FTC has gone after an alleged cellphone crammer.

Flirting tips

The class action charges that a typical initial text sent to cellphone users by Wise Media stated: "Lovegenietips Flirting Tips; 3msg/week for $9.99/m T&Cs: lovegenietips.com Msg&data rates may apply. Reply HELP for help, STOP to cancel."

Then through a process called "cramming," Wise allegedly used middlemen to place charges on millions of consumers' cellphone bills, even when consumers rejected the offers or simply didn't respond.

The suit also names Mobile Messenger Americas, mBlox Incorporated and Motricity, aggregators that it says acted as Wise's middlemen. Mobile Messenger had moved for dismissal of the claims against it but U.S. District Judge William Alsup, of the Northern California district, refused and allowed the case to go forward.

Alsup left the class's actions for conversion, negligence -- and the common law counts of unjust enrichment and money had and received -- intact. He found that at this stage of the proceedings, there was sufficient cause to believe that money was taken from cellphone users and restitution must be paid.

Not a new idea

The concept of ‘cramming’ charges on to phone bills is a not a new one,” said FTC Chairwoman Edith Ramirez. “As more and more consumers move to mobile phones, scammers have adapted to this new technology, and the commission will continue its efforts to protect consumers from their unlawful practices.”

In many instances, the FTC complaint maintains, Wise Media sent text messages to consumers that suggested they were subscribed to the service, which many consumers dismissed as spam and ignored. Even if consumers responded via text indicating that they did not want the services, they were charged on their mobile phone bills on a continuing basis.

Caught unaware

The commission says Wise Media and its operators took advantage of the fact that consumers may not expect their mobile phone bills to contain charges from third parties and that these charges appear on bills in an abbreviated manner that does not always clearly designate the company as the source of the charge.

As a result, it says, many consumers didn’t notice or understand the charges and paid the bills. To the extent that consumers did notice the charges, the process of obtaining refunds was difficult and often unsuccessful according to the complaint.

Wise Media is accused of going to great lengths to hide its contact information from consumers. And it says, when consumers were finally able to find a phone number for Wise Media, the company's call center employees frequently promised refunds that were never provided.